Experienced SaaS Lawyer Andrew S. Bosin based in New Jersey drafts SaaS contracts and SaaS subscription, MSA, vendor, customer, licensing and reseller agreements across the US for startup companies and vendors. 

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Andrew also works with early stage startup companies and founders helping them with Delaware business formation and incorporation and putting together founder restricted shareholder agreements which includes counseling regarding vesting rights and investment by friends and family and VC's.

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Andrew offers low cost Delaware Startup Legal Packages which includes bylaws, unanimous consent of board of directors, business name search, tax EIN number, IP assignment agreement, NDA, 83b and confidentiality agreement. 

 

When Should I Hire a Technology Law Firm?

 

When should you hire a Technology Lawyer for your startup or first big enterprise contract negotiation? Typically, Andrew’s startup clients seek his legal advice to incorporate when they are about to sign a contract with their first customer and need to put in place a corporate legal structure.

 

Andrew strongly advises against waiting until the last minute for a tech startup to incorporate, and would like to see startups hiring a tech agreement lawyer when the company's idea starts to take shape and is about to create intellectual property. 

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This creation of intellectual property can happen quickly. For example, during the very first discussion two people have on a Zoom call, or meeting for lunch, they could discuss a new idea and start to develop the code. It is during these early stage bursts of ideas that some of the best intellectual property can be created.

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If these ideas are not protected by a company being incorporated with shareholders assigning all of the intellectual property to the new company, you run the risk of someone walking out the door with very valuable information. 

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No matter where in the United States your tech startup business is located, or what state a customer is based in, Andrew can help you with your tech contracts and understanding of technology law. Tech startups, companies, vendors, customers, and resellers from California, Arizona, Colorado, Texas, Florida, Georgia, New York, and Pennsylvania all have retained Andrew's law firm.

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Andrew offers affordable flat fee technology legal services contracts packages to fit the budget of any size company, whether you are a startup that has just incorporated, or perhaps you are already landing enterprise customers.

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Early stage SaaS startups should do their due diligence thoroughly when seeking to hire a law firm offering SaaS legal services. Some firms say that they offer flat fees, but when you read the fine print, they begin to charge clients additional fees after a certain period of time has been expended revising or going over the agreements they drafted with clients.

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Andrew doesn't play these types of games. Unless a client dramatically changes the scope of a project, he does not charge additional legal fees.

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Because of his entrepreneurial experiences, Andrew understands better than most SaaS contract lawyers what it is actually like to build and scale a SaaS startup. You will not find too many attorneys out there in the US that work full time, own a tech law firm, and have also put thousands of hours into building two SaaS startup companies with partners as the General Counsel.

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In also building two SaaS startup companies with partners, Andrew has risked his own time and money in doing so. Andrew's clients like the fact that he has rolled up his sleeves and gotten in the weeds as an entrepreneur. The term that Andrew has heard time and time again from clients is empathy since he has been in the same or similar situations with startups that his clients have launched.

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In performing his startup company General Counsel duties, SaaS Contracts Attorney Andrew S. Bosin has drafted founder, shareholder, advisor and investor agreements, SAFE's, participated in the software development process, pitched investors, raised monies, closed multiple capital raise rounds, taken go-to market SaaS sales training, engaged in the sales process, and closed enterprise customer deals.

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When they do incorporate, Andrew’s clients usually incorporate in Delaware as a C Corporation or LLC. Sometimes they incorporate two businesses known as a C Corp and an LLC, with the LLC as the holding company and owning the C Corp, which is used as the customer licensing arm of the company.

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Why It's Important For SaaS Startup Founders To Assign All of The Intellectual Property To the Startup

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What SaaS startup founders sometimes lose sight of is the fact that waiting to incorporate does nothing to protect the intellectual property the founders have created. With waiting to incorporate, they are doing themselves a disservice because a founder could create something incredible, but unless there is a stock purchase agreement with a technology assignment agreement attached to it, the founder could possibly just walk away from the group with his or her IP.

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This is where a really good software attorney can help a new startup: by just trying to figure out how to create, manage, and protect its intellectual property. Startups need to understand that the IP created by founders, employees, and developers contracted to perform work for the company, should all be assigned to the startup.

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It would be just as devastating to a startup if a founder left the company with intellectual property they created to compete with their former company as if an outside software developer who the startup paid to develop the IP did the same thing.

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As a Software Lawyer, Andrew always tells SaaS startup founders when they ask about incorporation to get everything in black and white amongst all of the partners and founders. This means a startup should incorporate and require all the founders, in exchange for getting equity in the new company, to assign all of the intellectual property they have created to the new company.

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This accomplishes a few things. For starters, a founder cannot leave the startup and take what they invented with them. What they created is now owned by the startup. Second, if the startup needs to do a capital raise, no smart investor would ever give the startup as much as a nickel if they knew that the founder responsible for creating all of the IP has not yet assigned it to the company.

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What else is accomplished by signing shareholder agreements is that it likely prevents founders from exiting the company too early. This is because any stock agreement signed by a founder should have vesting in it. Typically, Delaware C Corp founder shareholder agreements should have language for a one-year cliff. This means the founder’s equity does not start vesting until the one-year anniversary date of the founder signing the agreement.

It is equally important to have your startup's SaaS lawyer draft or negotiate the software developer agreement in the event you are hiring outside developers to create your company's SaaS application. 

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SaaS Companies Should Draft and Implement Terms and Conditions and Privacy Policies To Be Put On Homepage of Website

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Another area in which Andrew tries to stress the importance of is the need for SaaS companies to draft and implement Website Terms of Use and Privacy Policy Agreements. Typically, for a SaaS company, these legal agreements would go in the footer on the home page of the company's website.

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What To Know Before Joining a SaaS Startup

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Andrew brings a unique perspective to counseling SaaS, software, and cloud startups, as he has been personally involved in every aspect of building and growing a SaaS business, from incorporation and getting the legal structure right to drafting founder stock purchase agreements, investor agreements, the software application development process, closing capital financing rounds, the marketing and sales process, and closing deals.

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Building a Recipe

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Two things that SaaS startup founders need are time and patience. Entrepreneurs who have never been in a startup don’t really know what to expect in terms of just how much time they need to put in to have a chance at being successful. Being in a startup also requires patience. Typically, in the beginning, things move slowly as you are looking for money, developers, and ultimately clients.

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You have to look at being in a SaaS startup as something analogous to creating a recipe that has never been written before. You can sit around in a room with your partners and write on boards and come up with great ideas, but until you put pen to paper and actually create or build something, you will never know what you have.

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That’s why it’s important to define roles early on and only go into business with other people if they are going to add immediate value to your company. You can never be certain of success but if each person in the startup stays in their lane and performs their job functions for sure the company will run more smoothly than let’s say everyone coloring outside of their lines and trying to do everyone else’s job.

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Defining roles also helps in terms of creating a business plan and raising money. A serious investor is going to want to see a well written business plan with each founder having a defined role. 

 

Issuing Stock To Co-Founders

 

One of the biggest struggles for startups is how much stock to issue to each co-founder. Andrew believes that the individuals who are contributing the most or are sacrificing the most in the early phases of the company should get more equity than others who are not putting in as  much time or contributing as much in capital.

 

For example, if a co-founder leaves his day job and now has no salary why shouldn’t he or she get considerably more stock than the other two co-founders who have chosen to remain in their day jobs. Or, how about the co-founder who is also the developer and without their building the product your company would not exist. This person should get more stock than anyone else with the exception of the founder who is putting in the most amount of money.

 

The funny thing is that VC’s don’t care who has the most stock they only care how much stock has been issued, to whom, how much stock remains and do any other investors have preferential rights to purchase more stock.

 

At the end of the day the last thing you want to have happen is for the co-founder who is the developer to get disgusted and quit because one or two other co-founders let their egos get in the way of demanding as much equity as the developer. 

 

Building Your Product

 

Another challenging area for SaaS startups is getting their product or application built and then having the capital to maintain, upgrade or repair what they have created. It’s a fact that 90% of startups fail. A big part of this failure is lack of money.

 

Most startups that start with little to no money have no idea how much funding it will really take to get their SaaS product built and maintained over the next few years. This is especially true if you intend to sell your product to the enterprise which typically requires a lot of work done before they go live with your product.

 

SaaS startups need to realize the value of bringing on an individual who has the skill set to build the software you need and to reward this person with a sufficient amount of equity. SaaS startups fail to realize that to build a truly robust enterprise ready SaaS application could cost them several hundred thousand dollars to build with a software development company. But, bringing on a developer who would do it for equity albeit it might take longer to complete is something to seriously consider. 

 

Creating a Budget and Financial Projections

 

You will never raise money from a seasoned investor or VC if you don’t have a really well done sales deck, budget and financial projections with the latter two things having the ability to be revised on a moment’s notice if certain business conditions change. 

 

What does this mean? It means that you need to create digital documents that track and project monthly costs, expenses and capital expenditures. This also needs to tie into revenue projections. If you’re sitting in a meeting with an investor and they ask you three quarters out what your earnings are going to look like you need to be able to ascertain the answer within seconds because you will have inputted this information into your sales projections.

 

You also need to tell the investor if they ask if certain expenses or capital expenditures will affect earnings in a certain quarter. An example of a capital expenditure is if you know that at a certain point in time you will need to allocate monies to build a new feature into your software or do an upgrade.

 

The SaaS Marketing and Sales Processes

 

Selling SaaS software is not like anything you will have ever experienced. When you sell traditional software installed locally on a customer’s network there is virtually little to no services offered by the vendor.

 

Contrast this with SaaS which by its very nature is a Services Agreement. Right from the start before going live with your product an enterprise customer is going to want changes to be made to the software. 

 

How do you sell software to Enterprise SaaS customers? The trap that startups fall into is pretty simple. They believe that their friends, colleagues and people they become friends with on social networks who work at large companies will use their product.

 

So they make a list of several hundred people and start to make phone calls and send emails. Usually, after a few months they have done a few demos, sent some sales decks and perhaps met a few people in person. But, at the end of the day they don’t really have a lot to show for their efforts. Why is that?

 

The reason that the SaaS sales process is so tricky to crack is because enterprise customers are looking for a specific product that fills a certain need. And, you need to identify who these individuals are that work for these prospective customers you are trying to pitch.

 

Just because your friend from college works at the company you want to get your product into does not translate into making a sale or getting your foot in the door. This person might even be in the very section or department of the company you are trying to sell to but if they are not the “person” who makes the decision whether or not to use your product they might as well work for another company.

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Important Security Questions To Ask Potential SaaS Vendors

 

Today, SaaS customers are generating and processing more sensitive data than ever before. Because most enterprise businesses mostly use web based software this means we are trusting that SaaS providers will protect and safeguard personal information. 

 

If you are a SaaS customer you need to do your due diligence. There are important security questions you should ask any potential vendor to demonstrate and also put in writing what specific security measures and protocols it performs or has put in place to safeguard and protect customer data. 

 

If you are contemplating using a specific SaaS vendor to fill a web based software need that your company has you should compile a list of questions to determine if this vendor has put the necessary measures and protocols in place to deal with protecting and securing personal information and data. 

 

You need the SaaS vendor to demonstrate that the vendor that it takes and continues to take the required appropriate technical and organizational measures to prevent the unauthorized or unlawful processing of personal data and accidental loss, damage or destruction to customer personal data.

 

The SaaS vendor should be transparent and explain what security measures it has put in place to prevent data protection breaches from occurring.

 

Customers should also be asking SaaS vendors about whether or not their company is doing the following:

 

(i)  employee training related to phishing emails; 

(ii) employee compliance and security training;

(iii) single sign on (SSO) or multi-factor authentication (MFA);

(iv) running compliance audits;

(v) putting implemented controls in place to limit who can access certain files or view certain resources;

(vi) putting in place security policies;

(vii) encryption of all data in transit and at rest;

(viii) testing of all systems (vulnerability and penetration);

(ix) having at SOC-1 or SOC-2 audit performed;

(x)  obtaining ISO 27001 compliance;

(xi) the vendor’s compliance officers being well versed in local privacy laws;

(xii) creating and implementing a comprehensive incident and response management plan to limit damages, remediate the problem and notify companies/individuals that a data breach/cyber attack has occurred.

(xiii) creating a secure data recovery plan which should include a data backup plan;

(xiv) listing the vendor’s latest subprocessors;

(xv) becoming PCI DSS compliant if your company processes credit cards or financial transactions; and

(xvi purchasing Errors and Omissions Insurance which should include coverage for cyber attacks.

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Key Points in Negotiating SaaS Vendor Agreements

 

Negotiating a SaaS (Software as a Service) vendor agreement can be a complex and daunting task, but it's important to get it right to ensure a fair deal for both parties. Here are some tips for customers to negotiate a SaaS vendor agreement:

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1. Understand Your Needs: Before entering into any negotiation, it's crucial to have a clear understanding of your organization's needs, goals, and priorities. Identify the features, functionality, and services that you require from the SaaS vendor, and make sure they are included in the agreement.

2. Know the Market: Research the market and compare multiple vendors to get a better understanding of what's available and what the competition is offering. Use this knowledge to your advantage during the negotiation process.

3. Review the Agreement: Carefully review the vendor's standard agreement before entering into negotiations. Make note of any clauses or terms that you find unacceptable or unclear, and be prepared to discuss them with the vendor.

4. Negotiate the Price: SaaS vendors often offer tiered pricing structures, so negotiate the price based on the features and functionality that you require. Be sure to also consider factors such as contract length and payment terms.

5. Negotiate Service Level Agreements: Service level agreements (SLAs) specify the level of service that the vendor will provide, such as uptime guarantees, support response times, and data backups. Negotiate SLAs that meet your organization's needs and include penalties for non-compliance.

6. Protect Your Data: Ensure that the agreement includes provisions for data security, confidentiality, and ownership. Make sure the vendor meets your organization's security and compliance requirements.

7. Seek Legal Advice: Consider consulting with legal counsel to review the agreement before signing it. Legal advice can help you identify potential pitfalls and negotiate more favorable terms.

 

In summary, negotiating a SaaS vendor agreement requires preparation, research, and a clear understanding of your organization's needs. By following these tips, you can negotiate a fair and advantageous agreement with your SaaS vendor.

 

Amazon AWS SaaS Reseller Contracts and Agreements

Andrew also provides legal advice for reviewing, drafting and negotiating Amazon AWS SaaS reseller agreements, contracts and templates. 

 

Amazon Web Services (AWS) is a cloud computing platform that provides a wide range of services to customers worldwide. One of the ways AWS reaches customers is through Software-as-a-Service (SaaS) reseller agreements.

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SaaS reseller agreements are contracts between AWS and a third-party vendor who is authorized to resell AWS services to their customers. These agreements typically outline the terms and conditions of the relationship between AWS and the reseller, including the rights and responsibilities of each party.

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Here are some key elements that may be included in an AWS SaaS reseller agreement:

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Service offering: The agreement will specify the AWS services that the reseller is authorized to offer to their customers. The reseller will typically be authorized to resell a subset of AWS services and will need to adhere to specific guidelines and requirements for offering these services.

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Pricing and billing: The agreement will outline the pricing and billing terms for the AWS services that the reseller is authorized to offer. The reseller will typically purchase AWS services at a discounted rate and then resell them to their customers at a markup.

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Support and maintenance: The agreement will specify the level of support and maintenance that AWS will provide to the reseller and their customers. This may include access to technical support, documentation, and training resources.

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Marketing and promotion: The agreement may include provisions related to marketing and promotion of the AWS services offered by the reseller. This may include guidelines for the use of AWS branding and logos, as well as requirements for promotional materials and activities.

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Intellectual property: The agreement may include provisions related to intellectual property rights, including ownership and use of trademarks, copyrights, and other proprietary information.

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Termination: The agreement will specify the conditions under which the agreement may be terminated by either party, including the process for giving notice and any associated fees or penalties.

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Overall, an AWS SaaS reseller agreement is a legal contract that establishes a relationship between AWS and a third-party vendor who is authorized to resell AWS services to their customers. These agreements are designed to protect the interests of both parties and ensure that the reseller is able to effectively and efficiently offer AWS services to their customers.

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Andrew also offers SaaS contracts legal advice to clients in Dallas, Connecticut, New York City, Washington DC, Miami, Orlando, Tampa, Indianapolis, Chicago, Austin, Denver, Salt Lake City, Atlanta, Long Island, Brooklyn, Nashville, Phoenix, San Diego, Los Angeles, San Jose, CA, Silicon Valley, Las Vegas, Columbus, Ohio, Houston and Boston.

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The use of Software as a Service (SaaS) applications has accelerated greatly over the last decade. SaaS is a delivery and subscription model in which web based software is accessed online.  The SaaS vendor hosts and maintains the software usually via a third party provider, instead of the more traditional model where the customer buys the software and installs it on their own computer.  

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Please call SaaS Attorney Andrew S. Bosin for a free consultation at 201-446-9643.

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You can also message Andrew at: andrewbosin@gmail.com.

 

SaaS Law Firm Andrew S. Bosin LLC will provide you with an initial consultation to see if and how I can serve your interests. Legal projects (and even just the language) can be complicated and intimidating. I will guide you through every step of your SaaS legal project, keeping you right up to date, making sure you understand exactly what is going on, and advising you on every decision that needs to be made. New Jersey SaaS Attorney keeps you involved and at the very center of my attention. Call today and schedule a free consultation.